Importance of insurance or role of life insurance in our life is one of the hot topic in the personal finance area these days. In fact with out an insurance policy you will not be able to make your financial life secure or your personal finance plans complete.
Before proceeding further, I hope you are well aware about what is insurance. You can read my previous article on life insurance. Many people think that insurance means an investment to save income tax. In fact from my experience I can say that, people mostly start talking about insurance every year just before income tax return or at the end of financial year.
But in this article, I will try to explain why life insurance is the most important investment of everyone’s life and why you should not miss understood this with other typical investments.
Why Insurance is a must to an individual in every day life?
There are various types of insurance like life insurance, home loan insurance, two wheeler insurance, car insurance, travel insurance and many more. But the core meaning of insurance is very simple, providing protection.
Here we are talking about insurance and a financial product can provide you protection through out the life. let’s discover the facts one by one to understand the role of insurance in our life.
Buy Safety & Protection
The biggest enemy of our life is the uncertainty. You never know when something wrong happen and your life can turn into a bad situation which can’t be managed easily. E.g. in case you have a sudden heart attack or any life threatening disease and you need 10 lakh to operate immediately, then how can you manage that money. Even if you have that much amount, you might have saved that as emergency fund or some other goal of life kids admission, buying flat or marriage of family member etc. In such case, if you would have taken a health insurance plan things can be managed better way.
Securing future goals
As per your current income, you have set up a life style with which you want your kids to grow up and make their future. You might be thinking of making more money in coming with a promotion or changing a job and at the same improving the life style. But have you ever though what will happen to your family in case you die in middle of everything? Will your kids be able to reach to their goals that you have planned? That can be done in case if you would have bought a term plan of adequate sum assured. E.g. a 1 crore policy could be a good idea for someone who is making 60,000/month to support the immediate financial crisis of your family.
Live Life tension Free
In our everyday life there are number of reasons for which we are getting disturbed or stressed out. E.g. in our home we have various electronic products like TV, refrigerators, Ac etc and also Bike, car. When things go wrong it s always expensive & exhaustive to manage their repairs. Its always better to buy maintenance insurance for each product and stay tension free. If you have taken a home loan, then go for a home loan insurance to stay away from the tension of who will pay the loan in case you die.
Build the habit of saving
When you understand the importance of insurance in life, you will gradually realize the meaning of saving and you will actually start saving. One should stay tension free by taking necessary insurance and then start accumulating money in various investment options.
Manage High Medical Expenses
Although I have mentioned about the health insurance, just want to add another point here is that the cost of medical treatment & related expenses are increasing like anything. Not only that now a days due to life style habit most of us are facing various diseases which are not common in medical science. You might have noticed that the number of cancer patient or diabetic patient has been increased like anything in last few years. There are special products like cancer care insurance to get additional benefits.
Travel The World With Safety
Due to globalization, many people are travelling abroad with family and it has become very easy these days. you can easily plan a trip with the help of any leading travel portals with affordable packages and enjoy foreign locations. But have you ever though how can you manage any unexpected situations like medical emergency, lost of passport or languages etc? Travel insurance plays an important role in this case. You might have listened the Malaysian Airline missing news. The family of those People who have done travel insurance may get some benefit due this unfortunate incident.
These are few important point I think to describe why insurance is important in individuals life. I know there are many benefits of insurance which can be added here and I will do that gradually in this post. At the same time you can also write and share your reason to buy an insurance policy?